Mr. Christian H. Beddies, Mr. Enrique A Gelbard, Mr. James McHugh, Ms. Laure Redifer, and Mr. Garbis Iradian
This chapter reviews Armenia’s growth performance and poverty indicators since the early 1990s. It seeks to respond to the following four questions: What were the sources of growth? Can the recent rapid growth be sustained? How responsive was poverty reduction to economic growth? What is the minimum annual growth needed for Armenia to reach its poverty target by 2015? The analysis is based on a growth accounting exercise and the results of recent household surveys.
Africa is home to some 30 regional trade arrangements (RTAs), many of which are part of deeper regional integration schemes.1 On average, each African country belongs to four RTAs (World Bank, 2004). There has been a renewed push in recent years for broader and deeper preferential trade arrangements in Africa. Some of the previously defunct regional arrangements (e.g., the East African Community) have been revived, while continental institutions—namely, the African Economic Community (AEC), the African Union, and the New Partnership for Africa’s Development (NEPAD)—have been launched under the auspices of the Organization of African Unity (OAU). In addition, African countries are preparing to negotiate FTAs with the European Union (EU) under the Economic Partnership Agreements (EPAs). The Southern African Customs Union (SACU) is negotiating an FTA with the United States. South Africa, the largest African economy, has already signed an FTA with the EU.2
The generally disappointing record of African RTAs warrants a reexamination of the underlying assumptions. Is the record disappointing because no preconditions were established to make the RTAs beneficial, dooming them to failure before they even began? Or is this record the result of poor design and/or implementation? What can we learn from the successes of regional trade integration in other parts of the world as well as from Africa’s failures?
Time-series data show that the impact of the RTAs on intra-African trade seems to have been small or insignificant. As a share of the continent’s global trade, intra-African trade declined over much of the 1970s before it recovered in the 1980s and the first half of the 1990s. It was not until the early 1990s that intra-African trade recovered to its early 1970s levels (Figure 2). Since the mid-1990s, however, it has stagnated at about 10 percent of total African trade despite intensified efforts to integrate regionally. Trade among the countries in the major RTAs (SADC, COMESA, ECOWAS, WAEMU, and CEMAC) has also grown erratically relative to their trade with the rest of the world, often showing no obvious trend over time—except perhaps WAEMU, whose intraregional trade has increased in recent years because of the improved performance of the CU (Table 3). For many RTAs, intra-arrangement trade as a share of their total external trade remains below intra-African trade as a share of total African external trade.
Over the past decades, African countries have set ambitious goals for their regional trade arrangements, but the results have so far fallen short of expectations. Most African RTAs started with a low level of intraregional trade. Thus, even if the RTAs had been more successfully implemented, the impact of these arrangements on Africa’s overall trade would have been small—unless they had created a more favorable environment for overall trade. The potential of the RTAs in exploiting economies of scale and enhancing competition has been limited by the lack of trade complementarity among RTA partners, small market size, poor transport infrastructure, and high trading costs at the border. More important, relatively high barriers against trade with the rest of the world have essentially turned RTAs into an import substitution policy at the regional and subregional levels.
Mrs. Harinder K Malothra, Mr. Milan M Cuc, Mr. Ulrich Bartsch, and Mr. Menachem Katz
Transparency and accountability in oil sector operations are necessary to improve governance in oil-producing countries. The same transparency and accountability guidelines that apply to non-oil revenue should apply to oil revenue. Oil revenue is part of government budgetary operations, and it is of overwhelming importance in the countries we are dealing with in this paper. The IMF’s Manual on Fiscal Transparency (IMF, 2001) states that comprehensive coverage of all fiscal activity undertaken by the central government is essential from a transparency standpoint. In some cases, the coverage should extend beyond the government itself: the public sector balance should be reported when nongovernmental public sector agencies undertake significant quasi-fiscal activities. The public should accordingly be provided with full information on the past, current, and projected fiscal activity of the government.
Mr. James Y. Yao, Mr. Gamal Z El-Masry, Padamja Khandelwal, and Mr. Emilio Sacerdoti
The purpose of this paper is to present the remarkable achievements of the economy of Mauritius since independence, and to highlight the factors that have made this performance possible. The record is impressive. Mauritius has achieved one of the highest per capita gross domestic products (GDPs) in Africa: about US$4,600 in 2003, up from about US$320 in the early 1970s. The economy, which at independence in 1967 was dependent entirely on the sugar crop, has been able to diversify rapidly, first into textiles, then into tourism, and more recently into information and communication services. In the process, the large pool of unemployed labor has been absorbed, and a remarkable macroeconomic stability has been maintained over the last 20 years. The country is well positioned to benefit from the increasing demand for information processing.